PMI Group emerges from bankruptcy protection
Private mortgage insurer PMI Group emerges from Chapter 11 bankruptcy protection
NEW YORK (AP) -- Private mortgage insurer PMI Group Inc. has emerged from Chapter 11 bankruptcy protection.
The company filed for bankruptcy protection in November 2011 after two of its subsidiaries were seized by regulators in Arizona. The regulators seized PMI Group's main subsidiaries in the state, PMI Mortgage Insurance Co. and PMI Insurance Co., because the companies did not have enough money on hand to meet state requirements.
PMI Group suffered heavy losses once the housing market bubble popped.
The company filed its reorganization plan in April, which was confirmed by the U.S. Bankruptcy Court for the District of Delaware in July. Distributions of cash or cash and stock in the reorganized company will be made to those that had valid and allowed claims as of Tuesday.
Private mortgage insurance protects lenders from losses if a homeowner defaults and the lender doesn't recoup costs through foreclosure. The insurance costs the borrower a monthly fee, typically a set percentage of the total mortgage loan.
